Kenya: The IMF reaches an agreement to grant a loan of 28 billion shillings to Kenya

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Nairobi – Staff of the International Monetary Fund (IMF) have reached an agreement to advance a 28 billion shillings loan to Kenya under the program financed by the Extended Financing Facility (EFF) and the Extended Credit Facility (ECF) of the IMF.

The agreement is the third revision of the economic policy program which took place between March 31 and April 22.

The review focused on discussing the progress of reforms and policy priorities undertaken by the government led by Uhuru Kenyatta.

The lender noted that Kenya is on track to meet its fiscal targets and has made progress and progress on its governance and anti-corruption agenda.

“Kenya’s fiscal position has been supported by strong tax revenues this year, supported by a robust economic recovery and the significant fiscal policy measures already taken under Kenya’s multi-year plan to reduce debt vulnerabilities,” said the lender.

The funds, the IMF said, have provided resilience that will help cushion some of the impact of the sharp rise in global energy and fertilizer prices on households and businesses.

Furthermore, he commended Kenya for making progress in restructuring state-owned enterprises, including Kenya Airways and Kenya Power, whose ongoing restructuring efforts were deemed important to minimize costs to the Treasury.

KQ will receive a 36.6 billion shillings bailout in the year starting in July as part of efforts to minimize cash constraints following global lockdowns triggered by the Covid-19 pandemic

The government ordered the airline to reduce its network and rationalize its flight frequencies.

“At KPLC, crystallizing an action plan to restore KPLC’s medium-term profitability and fully cover any funding shortfall through end-2023 will also be key to minimizing budget calls,” the IMF said.

The Bretton Wood institution further commended the CBK for making progress in strengthening its monetary policy framework.

“The banking sector remained resilient, supported by the measures taken by the CBK to support the economy and help households and businesses navigate a difficult environment,” the lender said.

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